Interesting NY Decision on Acceleration: U.S. Bank N.A. v. Gordon, 176 A.D.3d 1006 (2d Dept. 2019)

 “failure to pay this delinquency, plus additional payments and fees that may become due, will result in the acceleration of your Mortgage Note. Once acceleration has occurred, a foreclosure action . . . may be initiated.”

the Notice of Default stated that “[t]o avoid the possibility of acceleration,” Defendants were required to make certain payments by a specific time, or ASC “will proceed to automatically accelerate your loan.” (Emphasis added).

see https://www.jdsupra.com/legalnews/ny-appellate-court-holds-default-letter-29981/

So it seems that in New York a notice of intention to accelerate or any notice that says that the supposed “lender” will accelerate is not the same as an actual acceleration. Actually that makes sense because any other interpretation would defy the intent of the notice of default. the notice of default is for the purpose of giving the borrower notice that unless they bring their payments up to date, the entire loan will become due.

The inherent logical and legal problem with this decision is that it is inconsistent with Florida (see Bartram case) and other states who made decisions as to implied “deceleration” for purposes of evading the effects of the statute of limitation. In fact, this very decision uses such “logic” to arrive at the conclusion that the “lender” is not barred because there was no acceleration. There was only an expression of an intent to do so. therefore any claims arising from acceleration could not arise.

In short the courts are speaking out multiple sides of their mouths.

On the one hand they say that deceleration which has never been claimed or noticed occurs upon the rendition of an order dismissing a defective foreclosure action and that the statute of limitations does not run on the balance where the “lender” has  given “notice” that it is intending to accelerate. The courts have thus “interpreted” a legal fiction into practical existence contrary to the rules of law. The acceleration is rendered void upon losing in court. There are various possible criticisms of such doctrine but the best one I think is “nuts.”

On another hand (or mouth) they are approving of “interpretation” of a notice of default declaring an intent to accelerate as actual being the acceleration for purposes of foreclosure. This is also crazy. If the notice of intention to accelerate was the actual acceleration then the notice would be fatally defective pursuant to paragraph 22 — which requires notice of default and an opportunity to cure it without paying the whole balance. So “intent to accelerate” cannot be the same as declaring acceleration since it would violate both law and contact. yet there it is in most courts where the “intent” is sufficient (according to most judges) to be an actual declaration of acceleration.

And still on another hand (or mouth) they are saying that acceleration does not occur where the lender declares only an intent to accelerate. This again is insane in the context of the foregoing “doctrines” imposed by the courts.

And of course the declaration of intent is contained in a “notice of default” that is a complete legal nullity, to wit: it is declared on behalf of U.S. Bank and a trust neither of which have any interest in the loan.

In short, the courts are willing to bend every rule, break any logical flow, and divert every rule in order to rule in favor of nonentities just like this case. U.S. Bank had no right, title or interest in the loan, debt, note or mortgage and neither suffered any financial loss for nor was it exposed to any default  declared or otherwise. And neither did any entity supposedly or presumably represented by U.S. Bank.

Note that acceleration can be accomplished through filing of a lawsuit where acceleration is declared. But in nonjudicial states, this is not possible if nonjudicial foreclosure is pursued.

Not So Fast! Statute of Limitations Bars Claims for Enforcement of Statutory Duties But Does Not Bar Other Action For Damages Based on That Duty.

Claims under state statutes or Federal statutes have different periods of limitation under which you can file suit.

BUT — if the statutory duty that was breached is part of another claim that is not barred by the statute of limitations then you can survive a motion to dismiss or even an affirmative defense of statute of limitations.

Sound crazy? Actually it isn’t.

I have already discussed claims for damages that are barred by the statute of limitations but he same statute does not bar the same pleading as an affirmative defense because that is NOT, for procedural purposes, a “claim.” Those are generally called Defenses for Recoupment which allow awards of damages for money and even court costs and attorney fees that might ordinarily be barred. Several lawyers have recognized this and some who have been successful have brought it to my attention and even appeared as a guest on the Neil Garfield Show.

Now for the past year, more decisions are coming out predicated on public policy. You cannot raise a claim for violation of HAMP, FDCPA or TILA after the period of limitations has expired but you can use the statutory violation as the basis of a claim under another right of action. So if the state, for example, has a law that allows a private right of action for damages for breach of a duty, that duty might come from a statute that has expired but is still in operation as evidence of the duty of fair dealing and against wrongful enrichment.

see https://www.lexology.com/library/detail.aspx?g=1f747ad6-1d9c-43f8-8c61-431f099cc58b

The bank informed the plaintiffs of the error, provided a check for $15,000, and after mediation, paid the plaintiffs another $25,000. The plaintiffs filed a class action against the bank, asserting claims for violation of the WCPA and unjust enrichment. The bank moved to dismiss the action, arguing, among other things, that the WCPA claim was an “impermissible attempt to enforce the federal Home Affordable Modification Program (HAMP), which creates no private right of action.” The court disagreed with the bank, determining that while the mortgage modification application was filed pursuant to HAMP, the plaintiffs “do not seek to enforce HAMP.” Instead, the plaintiffs argue that the wrongful denial of their application and failure to disclose the calculation error for three years “constitutes unfair or deceptive conduct in violation of the [WCPA].”

SCOTUS Revives Qui Tam Actions

Until this decision I had assumed that Qui Tam actions were essentially dead in relation to the mortgage meltdown. Now I don’t think so.

The question presented is whether actions brought by a private person acting as a relator on behalf of a government entity can bring claims for damages under the False Claims Act. Such actions are barred by the statute of limitations, which requires a violation to be brought within six years of the violation or three years “after the date when facts material to the right of action are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances.”[3] 

In a unanimous decision the Court held that the tolling period applies to private relator actions. This does not by any stretch of the imagination create a slam dunk. Relators must have special knowledge of the false claim and the damage caused to the government. It will still be necessary to argue in an uphill battle that the true facts of the securitization scheme are only now unfolding as more evidence appears that the parties claiming foreclosure are neither seeking nor receiving the benefit of sale proceeds on foreclosed property.

Some claims might relate back to the origination of mortgages and some relate to the trading of paper creating the illusion of ownership of loans. Still others may relate to the effect on local and State government (as long as the Federal government was involved in covering their expenses) in the bailout presumably for losses incurred as a result of default on mortgage loans in which there was no loss to the party who received the bailout, nor did such bailout proceeds ever find the investors who actually funded the origination or acquisition of loans.

And remember that a relator needs to prove special knowledge that is arguably unique. The statute was meant to cover whistleblowers from within an agency or commercial enterprise but is broader than that. The courts tend to restrict the use of Qui Tam actions when brought by a relator who is not an “insider.”

See https://www.natlawreview.com/article/supreme-court-recognizes-longer-statute-limitations-qui-tam-plaintiffs-false-claims

See Review of False Claims Act 18-315_1b8e

See Cochise Consultancy, Inc. v. United States ex rel. Hunt

I also find some relevance in the decision penned by J. Thomas writing for the court as it applies to TILA Rescission, FDCPA claims, RESPA claims and other claims based upon statute:

Because a single use of a statutory phrase generally must have a fixed meaning, see Ratzlaf v. United States, 510 U. S. 135, 143, interpretations that would “attribute different meanings to the same phrase” should be avoided, Reno v. Bossier Parish School Bd., 528 U. S. 320, 329. Here, the clear text of the statute controls. Cochise’s reliance on Graham County Soil & Water Conservation Dist. v. United States ex rel. Wilson, 545 U. S. 409, is misplaced. Nothing in Graham County supports giving the phrase “civil action under section 3730” in §3731(b) two different meanings depending on whether the Government intervenes. While the Graham County Court sought “a construction that avoids . . . counterintuitive results,” there the text “admit of two plausible interpretations.” Id., at 421, 419, n. 2. Here, Cochise points to no other plausible interpretation of the text, so the “ ‘judicial inquiry is complete.’ ” Barnhart v. Sigmon Coal Co., 534 U. S. 438, 462. Pp. 4–8. (e.s.)

Point of reference:

I still believe that local governments are using up their time or might be time barred on a legitimate claim that was never pursued — that the trading of loans and certificates were transactions relating to property interests within the State or County and that income or revenue was due to the government and was never paid. A levy of the amount due followed by a lien and then followed by a foreclosure on the mortgages would likely result in either revenue to the government or government ownership of the mortgages which could be subject to negotiations with the homeowners wherein the principal balance is vastly reduced and the government receives all of the revenue to which it is entitled. This produces both a fiscal stimulus to the State economy and much needed revenue to the state at a cost of virtually zero.

In Arizona, where this strategy was first explored it was determined by state finance officials in coordination with the relevant chairpersons of select committees in the State House and Senate and the governor’s office that the entire state deficit of $3 Billion could have been covered. Intervention by political figures who answered to the banks intervened and thus prevented the deployment of this strategy.

I alone developed the idea and introduced it a the request of the then chairman of the House Judiciary committee. We worked hard on it for 6 months. Intervention by political figures who answered to the banks intervened and thus prevented the deployment of this strategy. It still might work.

See also

http://www.mondaq.com/unitedstates/x/809786/White+Collar+Crime+Fraud/False+Claims+Act+Statute+of+Limitations+Relators+Now+Get+Up+to+10+Years+to+File+Suit

The Court also held that the relator’s knowledge does not trigger the limitations period. The statute refers to knowledge of “the official of the United States charged with responsibility to act in the circumstances[.]” Had the Court interpreted this provision to include relators, fears of protracted tolling by relators would largely dissipate because the qui tam action would have to be filed within three years of the relator’s knowledge or six-years of the violation, whichever is later. The Court rejected this approach, finding the express reference to “the” government official excludes private citizen relators. The Court held it is the government’s knowledge that triggers the limitations period.

The Court, however, left unanswered the question of which government official’s knowledge triggers the limitations period. The government argued in its briefs and at oral argument that such official is the Attorney General or delegate. As we have noted in prior posts (see Holland & Knight’s Government Contracts Blog, “ Self-Disclosure and the FCA Statute of Limitations: Cochise Consultancy, Inc. v. United States v. ex. rel. Billy Joe Hunt,” March 27, 2019), there is a broader question as to whether knowledge by governmental actors outside of DOJ, including knowledge trigged by self-disclosure, should start the limitations period. The Court did not rule on this question, though its decision hints at an interpretation that includes only the Attorney General. If true, DOJ becomes the sole repository for disclosures that trigger the limitations period. That is, unless defendants can argue that DOJ “should have known” of the violation when investigative bodies such as the Office of Inspector General or the FBI have actual knowledge of the violation … more on this latter issue is sure to come.

If you don’t challenge the smoke and mirrors the smoke becomes law and the mirrors become an inescapable nightmare.

Bottom Line: Failure to attack the facial validity of the documents is virtually hanging the homeowner letting him/her twist in the wind. Without such a relentless attack based upon scrutiny of the exact wording on documents revealing that nobody is actually identified as a real party in interest, you will be trapped by an endless cascade of legal presumptions against the homeowner.

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Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult or check us out on www.lendinglies.com. Order a PDR BASIC to have us review and comment on your notice of TILA Rescission or similar document.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM.
A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
==========================

In response to an email from a fellow attorney asking me about bankruptcy (BKR), the statute of limitations (SOL) adn renewing the debt after BKR discharge or renewing the payment by acknowledging it after BKR, I wrote the following.

  1. If the loan was scheduled as secured in favor of a particular creditor it is probably incorrect. If the loan was subject to a valid encumbrance at all, it almost certainly was not in favor of the current claimant, who has not purchased the debt and therefore no debt was transferred in fact despite paperwork appearing to state the contrary. Nor has the current claimant obtained authorization from the real owner of the debt as agent or representative.
  2. SOL: You are right but courts got tricky with this and they rule, like in Florida, that the statute ran out only on payments that were due and that there is a presumption of deceleration at some point. Check NY law. Florida is changing back to the old rule slowly which supports your view.
  3. Any payment on a debt can restart the statute running. Check Federal BKR law and NY Law. Payment while in BKR presents problems if not done with court approval.
  4. Under “modification” there are several problems. First every such modification is in actuality the transfer of the debt from an old pretender to a new pretender (servicer). In most respects it is a new loan agreement entirely, probably subject to TILA disclosure requirements because the old chain of title is being abandoned and a new one is being started — all without any reference to or formal grant of authority from the actual owner of the debt.  Payments under such a “modification” agreements are not really payments on the debt because the payment is neither going to the owner of the debt nor anyone formally authorized by the owner of the debt. Such payments could be construed as a new and probably unenforceable obligation.
  5. Acknowledgment by borrower of the debt owed to Pretender A directed to Pretender B is not acknowledgment of the debt if neither of them was the owner of the debt or an authorized representative or agent of the owner of the debt. But unless you attack the facial validity of the instruments, the law of the case will slide toward treating both pretenders as real. Once final that becomes irreversible.
  6. BKR discharge operates by law and not individual action. See BKR law and procedure. A promise to pay AFTER discharge might subject both the pretender creditor and the borrower to sanctions.
  7. An unconditional promise is just that and it is enforceable if supported by consideration. But there is no consideration.
  8. At a minimum there should be disclosure to the court and possibly seek court approval for agreements signed. But if you do that you are again creating law of the case that essentially requires treatment of the pretenders as real parties.

9th Circuit Creeps Up the Ladder in Hoang TILA Rescission Breakthrough

This case comes the closest yet to the truth about TILA Rescission. And it requires that TILA Rescission be applied — if there is an action to enforce within the statute of limitations covering contract actions in the state in which the property is located.

The court’s conclusion that there must be a statute of limitations is derived from its erroneous assumption AGAIN that TILA rescission is a claim rather an event. Jill Smith has done an outstanding job of moving us toward the final step in TILA REscission, to wit: TILA Rescission is procedural and it is an event. Once delivered it has ended the loan, the note and the mortgage by operation of law, just as the statute says. There is no statute of limitations on an event because it is not a claim.

Only a claim for breach of TILA duties could be subject to a statute of limitations. Failure to file suit, as specifically and expressly pointed out by a unanimous SCOTUS decision in Jesinoski does not affect the effect of TILA rescission. Courts don’t like it but that is the law and now this court has moved up to the precipice of saying exactly that.

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Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.
I provide advice and consultation to many people and lawyers so they can spot the key required elements of a scam — in and out of court. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM. A few hundred dollars well spent is worth a lifetime of financial ruin.
PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORM WITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.
Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345 or 954-451-1230. The TERA replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
===========================

Hoang v Bank of America 12-6-18

See also ! Financial Freedom Acquisition LLC v. Standard Bank & Trust Co., 2015 IL 117950

! Financial Freedom Acquisition v Standard Bank -Analysis

! If You Own Your Home in a Land Trust

TILA Rescission is no more a claim than a warranty deed. It just exists. You don’t need to sue periodically because by operation of law (the exact wording of the TILA REscission statute) the deed exists and confirms title. In the same way TILA Rescission eliminated the lien encumbrance, the note and even the loan agreement and replaces it with a statutory “agreement” to unwind the debt.

The note and mortgage remain void throughout any time period after the notice of rescission is sent. This court gets close but veers off what they obviously believe is a radical end result — i.e., that the right to claim the debt expires if the creditor fails to comply with the duties imposed by TILA REscission and refuses to even acknowledge the existence of the rescission. That “radical result” is precisely what is mandated by the statute and the courts have no right to legislate it away. The legislature has that power but not the courts. Simple as that.

Contrary to what this court is saying a demand for injunction (as one would do under authority of a valid warranty deed) is NOT a lawsuit to enforce the rescission. The rescission is already in force. And the note and mortgage no longer exist. A Lawsuit to enforce the rescission would ONLY be a lawsuit that seeks to enforce the statutory duties during the time allowed by the statute of limitations in TILA which everyone agrees does not apply.

Ultimately the statute says that regardless of ANY defense a claimed creditor might have (including limitations which is an affirmative defense) the rescission is effective when delivered (mailed under USPS). Even the three years can only be raised by a party with standing and who can prove it WIThout reference to the note or mortgage. Real facts showing they paid for the debt . Those facts don’t exist and most people know it. But because of the “free house” myth they continue to flout the law and legislature from the bench.

But this case almost gets me over the hump where I can say “I told you so.”

Here are some notable quotes from this very important decision.

If a creditor fails to make required disclosures under the Truth in Lending Act (TILA), borrowers are allowed three years from the loan’s consummation date to rescind certain loans.1 15 U.S.C. § 1635(f). Borrowers may effect that rescission simply by notifying the creditor of their intent to rescind within the three-year period. Jesinoski v. Countrywide Home Loans, 135 S. Ct. 790, 792 (2015). TILA does not include a statute of limitations outlining when an action to enforce such a rescission must be brought

On April 15, 2013 (within the three-year period), Hoang sent the Bank notice of intent to rescind the loan under TILA. The record reflects that the Bank took no action in response to receiving the notice.

Once a borrower rescinds a loan under TILA, the borrower “is not liable for any finance or other charge, and any security interest given by the [borrower] . . . becomes void upon such a rescission.” 15 U.S.C. § 1635(b); see 12 C.F.R. § 226.23(a)(3). Within 20 days after the creditor receives a notice of rescission, the creditor must take steps to wind up the loan. 15 U.S.C. § 1635(b). “Upon the performance of the creditor’s obligations under this section, the [borrower] shall tender the property to the creditor . . . [or] tender its reasonable value.” Id. Once both creditor and borrower have so acted, the loan has been wound up.

However, the Supreme Court altered that usual procedure in Jesinoski. It eliminated the need for a borrower to bring suit within the three-year window to exercise TILA rescission. Instead, “rescission is effected when the borrower notifies the creditor of his intention to rescind.” Jesinoski, 135 S. Ct. at 792. “[S]o long as the borrower notifies within three years after the transaction is consummated, his rescission is timely. The statute does not also require him to sue within three years.”

A party may amend its pleading with the court’s leave, which “[t]he court should freely give . . . when justice so requires.” Fed. R. Civ. P. 15(a)(2). “This policy is to be applied with extreme liberality.” Eminence Capital, LLC v. Aspeon, Inc., 316 F.3d 1048, 1051 (9th Cir. 2003) (internal quotation marks omitted). “Dismissal with prejudice and without leave to amend is not appropriate unless it is clear on de novo review that the complaint could not be saved by amendment.” Id. at 1052. Leave to amend can and should generally be given, even in the absence of such a request by the party. See Ebner v. Fresh, Inc., 838 F.3d 958, 963 (9th Cir. 2016) (“[A] district court should grant leave to amend even if no request to amend the pleading was made, unless it determines that the pleading could not possibly be cured by the allegation of other facts.”).

 

Statute of Limitations on TILA Rescission: How long does the debt survive after notice of TLA rescission?

The simple answer is that the debt, or the claim on the debt, ends 20 days after notice of rescission. Otherwise the statute 15 U.S.C. §1635 and SCOTUS would have had no meaning when it says that the rescission is effective by operation of law at the time the notice is delivered. It provides a  very short window for “lender’s” compliance.

In reality, I have referred to a one year limitation because the courts are trying to mitigate the punitive intent of the TILA rescission statute. 15 U.S.C. §1640(e) basically leans toward a one year limitation for borrower’s claims against “lenders” based upon disclosure which is what TILA rescission is all about.

The borrower has every right to force compliance and get a court order requiring (a) return of canceled note (b) filing a release and satisfaction of the encumbrance and (c) payment of money to the borrower — but they have no such right after one year has expired starting with the date of the notice or date of delivery.

Employing analysis based upon the goose and the gander, it would follow that the one year limitation would also apply to “lenders” seeking payment from the borrower based upon the statutory requirement that the borrower pays the debt.

If this analysis was adopted as doctrine it would create a window of opportunity for a lender in violation of the three statutory duties under TILA rescission to cure the violation and bring the claim for repayment. This interpretation would be contrary to the wording and intent of the TILA rescission statute — as it would cloud the purpose of the statute — to enable borrowers to get out of the deal they are in and seek a new deal instead. Nobody would lend to the borrower if there was a risk that they might still owe money to a prior lender, even though the law makes the debt unsecured. Nonetheless it is entirely possible that the courts will invent such a doctrine. 

Let us help you plan for trial and draft your foreclosure defense strategy, discovery requests and defense narrative: 202-838-6345. Ask for a Consult.

I provide advice and consent to many people and lawyers so they can spot the key elements of a scam. If you have a deal you want skimmed for red flags order the Consult and fill out the REGISTRATION FORM. A few hundred dollars well spent is worth a lifetime of financial ruin.

PLEASE FILL OUT AND SUBMIT OUR FREE REGISTRATION FORMWITHOUT ANY OBLIGATION. OUR PRIVACY POLICY IS THAT WE DON’T USE THE FORM EXCEPT TO SPEAK WITH YOU OR PERFORM WORK FOR YOU. THE INFORMATION ON THE FORMS ARE NOT SOLD NOR LICENSED IN ANY MANNER, SHAPE OR FORM. NO EXCEPTIONS.

Get a Consult and TERA (Title & Encumbrances Analysis and & Report) 202-838-6345. The TEAR replaces and greatly enhances the former COTA (Chain of Title Analysis, including a one page summary of Title History and Gaps).

THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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Any borrower claim based upon a remedy in the TILA statutes has a one year limitation. In TILA rescission, the claim for the debt arises not from the note and mortgage which are void, but from 15 USC §1635. The statute replaces the contract. The “lender” has a claim to collect the debt under that statute. But they must first comply with their three statutory duties before they can demand and then enforce collection of the debt. The debt can be satisfied by tendering title to the home. But a part of the debt is easily satisfied by the payment to the borrower from the Lender.

The confusion arises from the fact that statutory rescission is different from common law rescission. Common law rescission puts tendering payment on the debt first, whereas statutory rescission puts payment of the debt last.
In TILA Rescission, while there is no express limitation provision as to the ability of the lender to collect on the debt, they can never collect the debt unless, within 20 days, they have complied with the three duties set forth in the statutory scheme for statutory rescission. After that they are barred from enforcing the debt. It is intended to be punitive to encourage “lenders” to comply with disclosure requirements.
Theoretically then, they can never collect the debt because they never comply with the three duties that are condition precedent to seeking payment on the debt. So academically speaking the “lender” is barred after 20 days. But realistically the language of the statute leans heavily to one year for claims arising from TILA and that includes rescission although the statute doesn’t say that expressly.
So I have taken the position that they are barred after 20 days from ever expressing a claim on the debt or, if one wants to “interpret” the statute (against the advice of SCOTUS in Jesinoski) the limitation would be one year from the date of rescission or from the last day that “lender” compliance was due. That interpretation would mean, though, that the “lender” had complied with its duties under statutory rescission 15 U.S.C. § 1635.
Lastly there is another academic thread that would state that there is no limitation on the right of the lender to collect the debt as long as they complied with the statute even if it was outside of the 20 day period. This conclusion seems unlikely as it would change the wording in 15 U.S.C. §1635 and render lender’s compliance practically irrelevant. It would insert language into the statute that would mean that the rescission was not effective when mailed and there was nothing the borrower could do about that.

The Neil Garfield Radio Show LIVE at 6 pm Eastern: The Statute of Limitation

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Q and A: Statute of Limitations

In this episode I will be discuss two states with drastically different interpretations of Statute of Limitations.  In Florida the Bartram decision ruled that every time a homeowner misses a payment, the statute resets.  In stark contrast is a New York case called Costa v. Deutsche Bank that clarified that statute of limitations will be enforced.

The Bartram decision created a bad precedent where Pretender lenders (or any other Plaintiff) can look to Bartram as support for taking a pot luck shot at getting a foreclosure judgment and sale, followed by eviction. If they fail they can try again.

The application of res judicata, statute of limitations and Rooker Feldman don’t apply to the banks.

This creates a double standard.  The ambidextrous treatment of homeowners versus the financial sector is exactly what the equal protection clause of the U.S. Constitution (and, the Florida Constitution) says cannot occur under guarantees of equal protection under the law.

In stark contrast to Bartram was a New York decision last week called Costa v. Deutsche Bank.

The court was asked whether the statute of limitations applies. It did and according to NY Law it was too late for the pretend lender to take action.

Get a consult! 202-838-6345 or https://www.vcita.com/v/lendinglies

THIS DISCUSSION IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE.

Contact Attorney Charles Marshall at:

Charles Marshall, Esq.
Law Office of Charles T. Marshall
415 Laurel St., #405
San Diego, CA 92101

Florida Supreme Court dismisses motion for rehearing in case concerning Florida Statute of Limitations

by K.K. MacKinstry

Last week a Manhattan court ruled in Costa v. Deutsche Bank that Deutsche Bank had failed to foreclose within the six year window and was therefore barred from collecting the debt.  In the same week, the Florida Supreme Court denied a motion for rehearing in Bartram v. U.S. Bank regarding the statute of limitations in foreclosure cases, therefore ruling that there is no statute of limitation on mortgage debt in Florida.

In the 2016 Bartram opinion the court ruled that if there is an involuntary dismissal of a foreclosure in a foreclosure case, a follow-up foreclosure action can be filed. This decision allows a lender to “correct” issues in litigation and refile until they can successfully foreclose on a homeowner and is likely unconstitutional.  Bartram ruled that a follow-up filing could be done to accelerate the debt involved in a mortgage foreclosure again and again.

The decision is an especially important one for lending institutions in Florida who fought tooth and nail for the decision.   Banks are allowed to file foreclosure even in circumstances when previous foreclosure actions have been attempted.  For exampl,e if a bank loses because they came to court with an unendorsed note, this decision tells the bank exactly what issue to cure before they file to foreclose again.  The banks have deep pockets and can file an unlimited number of lawsuits, while the homeowner will be forced to defend against foreclosure again and again until the bank can successfully foreclose.

This ruling affects all Floridians.  There is no other state in America where a bank receives a second, third, fourth, fifth or sixth time (or more) to successfully foreclose.  In theory, a homeowner could spend decades in litigation before the bank finally wears them down or bankrupts them while defending their home.

Statute of limitations are important in debt collection because people should not be pursued for decades of their lives- especially by a bank that can’t prove standing without forging and fabricating documents to “perfect” its illusion of being a holder.

This is likely a final decision and a terrible decision at that.  The Florida Supreme Court is no longer bothering to hide its bias for the banks.

A statute of limitations sets a time limit for initiating a legal claim. In the context of home foreclosure, the statute of limitations for written contracts (that is, mortgages) is usually the applicable statute or there may be a specific statute that addresses foreclosures, as is the case in New Jersey. If the foreclosure is initiated after the statute of limitations has expired, the lender’s claim is invalid and the lender is not entitled to foreclose.

Raising the Statute of Limitations as a Defense to Foreclosure

If the relevant time period for a foreclosure statute of limitations has run out, then this is an affirmative defense to foreclosure. The statute of limitations defense must be asserted by the homeowners to defeat the lender’s claim. If the homeowners do not assert the statute of limitations defense, then this defense is deemed waived. Therefore, it is extremely important for borrowers to be aware of the statute of limitations for foreclosures in their state because it could mean a quick end to a foreclosure if the time limit has expired.

On the other hand, if the statute of limitations runs out after the foreclosure process has already started, then the statute of limitations will not be a defense to the foreclosure. This means that even if a foreclosure takes years to complete and the time period under the statute of limitations covering foreclosures runs out while the foreclosure is in process, this will not prevent the foreclosure from going through. For instance, if the lender files a foreclosure lawsuit in January, 2017, but the statute of limitations runs out in June, 2017 while the foreclosure is pending, a statute of limitations defense is not available. In order to comply with a statute of limitations, the lender must simply begin the foreclosure before the time period expires.

However, in most states,  if the foreclosure is cancelled or dismissed (perhaps due to a procedural error by the lender), then the statute of limitations will still apply to any subsequent foreclosure. The lender could restart the foreclosure, but the restart would have to occur within the time period provided for in the statute of limitations. In the example above, if the foreclosure was dismissed in April, 2017, the lender would need to restart the action prior to June, 2017 to fall within the statute of limitations. It is important to note that if the borrower makes a payment in the interim, this will reset a statute of limitations in most cases.

How to Determine the Statute of Limitations in Your State

Each state has its own set of statutes of limitations. Generally, for a written contract, including mortgages, the statute of limitations will vary from three years to 15 years, though this differs from state to state with most falling within the three-to-six-year range. Most states have a statute of limitations of six years covering foreclosures.

The statute of limitations clock for a mortgage foreclosure usually starts when the default occurs–that is, when the borrowers stop making mortgage payments. It is usually calculated from the date of the last payment or from the due date of the first missed mortgage payment. Again, this depends on your state’s particular statute.  If you have the misfortune of living in Florida, every time you miss a payment, the statute of limitations begins all over again.

New York Judge finds foreclosure time-barred and cancels Mortgage: Costa v. Deutsche Bank

Read Costa v. Deutsche Bank here: Costa v. Deutsche Bank 2017 03 29

Unlike Florida where there is no statute of limitations and every missed mortgage payment resets the clock, New York enforces the statute of limitations for debt collection including mortgages.

A federal judge has granted two New Rochelle, New York homeowners’ request to have their mortgage canceled, ending their nearly 10-year battle to keep their house after defaulting on a $544,000 mortgage loan they took out in 2006.

The decision on Thursday by U.S. District Judge Katherine Polk Failla in Manhattan was a defeat for Deutsche Bank National Trust Co, trustee for a trust that owned the mortgage loan, which had argued that the couple was getting a free house on a technicality. Under New York state law, Vito and Marion Costa have a right to the property mortgage-free because a six-year statute of limitations on foreclosing on it had passed, Failla said.

More information to follow in the next week when we obtain the case specifics.

This is excellent news for New York homeowners and will hopefully be applied in other states.

 

 

Lawsuit Seeking Disgorgement Might Not Be Barred by Statute of limitations

What is apparent here is that the Courts are coming to terms with the possibility that those relying upon a statute of limitation as a defense to various claims might NOT be protected by an otherwise applicable statute of limitations.

The premise enunciated in a decision that seeks affirmation from the U.S. Supreme Court, is that disgorgement is not monetary damages or a penalty. It is an equitable finding that a party has been unjustly enriched and therefore has no present right to hold onto ill-gotten gains. The decision could result in elimination of the statute of limitations as a defense for the banks.

Get a consult! 202-838-6345

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
 
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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This is a potential thrust to the heart of the bank strategy to create a vacuum, fill it with illusory claims on behalf of complete strangers to the transactions, and walk away with a free house after submitting an utterly fraudulent “credit bid.”.
The SEC is asking the Supreme Court to affirm the Tenth Circuit’s decision in SEC v. Kokesh, which held that “disgorgement is not a penalty under [28 U.S.C.] § 2462 because it is remedial” and, therefore, is not subject to the five-year federal statute of limitations in § 2462. see https://www.findknowdo.com/news/01/04/2017/sec-urges-supreme-court-affirm-disgorgement-not-subject-statute-limitations?utm_source=Mondaq&utm_medium=syndication&utm_campaign=View-Original
A favorable SCOTUS decision would have the effect of recasting the suits for damages as instead suits for disgorgement because neither the servicers nor anyone they represent had any right to collect or enforce the putative loan by an undisclosed and probably unknown creditor. This would have the same ultimate effect as TILA rescission which the courts have steadfastly resisted despite the clear language of 15 USC §1635 and SCOTUS in Jesinoski v Countrywide.

Bartram: The Missing Links

Why did the Plaintiff lose in its “standard foreclosure”?

The decision on acceleration is essentially this: If the banks do it, it doesn’t count.

While Bartram didn’t turn out the way we want, there are two paths that nobody is talking about — logistics and res judicata.

Get a consult! 202-838-6345

https://www.vcita.com/v/lendinglies to schedule CONSULT, leave message or make payments.
 
THIS ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.
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The Florida Supreme Court decision in Bartram reinforces the absurd — that after losing in trial court, the pretender lender can sue over and over again for “new defaults.” The court has re-written the alleged “loan contract” to mean that a loss in court means that their acceleration of the entire loan becomes de-accelerated, meaning that acceleration is merely an option hanging in the wind that doesn’t really mean anything. The decision might have consequences when the same logic is applied to other actions taken pursuant to contract. The decision on acceleration is essentially this: If the banks do it, it doesn’t count.
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But two things remain outstanding, one of which the court mentioned in its opinion. Why did the Plaintiff lose in its “standard foreclosure”? The issues that were litigated as to the money and/or documentary trail have been litigated and are subject to res judicata. The Plaintiff, if it is the same Plaintiff, is barred from relitigating them.
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If Plaintiff failed to prove ownership of the loan and was using fabricated void assignments and endorsements, the lifting of the statute of limitations should not help them in attempting to bring future litigation. Many other such issues were undoubtedly raised in the original case. The Plaintiff would be forced to argue that while the issues were raised, they were not actually litigated and a judgment was not entered based upon those issues.
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The Florida Supremes took away the Statute of Limitations, up to a point (see below) but gave us the right remedy — res judicata. Even if a new Plaintiff appears, the questions remain as to how the alleged loan papers got to them remain open, as well as whether the paper represented any actual loan contract absent an actual lender.
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And then there are the logistics that I don’t think were considered in its decision. According to the Bartram decision the act of acceleration vanishes if the Plaintiff loses. The statute of limitations does apply for past due payments that are more than 5 years old. That means, starting with the date of the lawsuit (not the demand), you count back 5 years and all payments due before that are barred by the SOL.
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So if a Plaintiff loses the foreclosure, it can bring the action again based upon missed payments that were due within the SOL period. Of course if the Defendant won because the Plaintiff had no right or authority to collect on the DEBT, the action should be barred by res judicata. But putting that issue aside, there are other problems.
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“Servicing” of a designated “loan account” is actually done by multiple IT platforms. The one used for foreclosure comes out of LPS/Black Knight in Jacksonville, Florida. This is the entity that  fabricates documents and business records for foreclosure. It is not the the actual system used for servicing that deals in reality with the alleged borrower and accepts payments and posts them. It is incomplete. This system intentionally does not have all the documents and all the “business records” relating to the loan. For example there is no document or report that shows who was and probably still is receiving payments as though the loan were performing perfectly.
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The decision on when and if to foreclose is always performed by LPS/Black Knight in order to prevent multiple servicers, trustees, banks and “lenders” from suing on the same loan, which has happened in the past. LPS assigns the loan to a specific party who is then named by Plaintiff. And LPS creates all the fabricated paperwork to make it look like that party is the right Plaintiff and that the business records produced by LPS can be presented as the business records of the party whose name was rented for the purpose of foreclosure. It is LPS documents that are produced in court, not the records of the named Plaintiff.
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So here is a sample simple scenario that will illustrate the logistical problem created by the Florida Supremes: LPS issues a notice of default letter naming the claimant as XYZ, as trustee for XYZ series 2006-19B Pass Through Trust Certificates. Previously XYZ lost the foreclosure action by failing to prove that it had any relationship with the loan. The Notice of Default and right to reinstate issued by LPS on behalf of XYZ must be for payment that was within the SOL. This action of course waives the payments, fees etc that are barred by the SOL. It also assumes that the date of the letter AND THE LAWSUIT will be within the SOL period. So for example, if the last payment was on December 1, 2006 and the letter refers to a missed payment starting with January 1, 2012, the letter is proper. But if suit is not commenced until January 2, 2017, the letter is defective and the lawsuit is barred by the SOL. Further the doctrine of res judicata bars any cause of action that was litigated previously.
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All of this leads to a court determination of what issues were previously raised, when they were raised and whether the Final Judgment in favor of the homeowner means anything.

Renewing the Statute of Limitations Accidentally: Modifications and Payments

It seems apparent to me that the banks are sidestepping the statute of limitations issue by getting homeowners to renew payments after the statute has run. Given the confusion in Florida courts it is difficult to determine with certainty how the statute will be applied. But the execution of a modification agreement would, in my opinion, almost certainly waive the statute of limitations, particularly since it refers to the part of the alleged debt that was previously barred by the statute. It would also, in my opinion, reaffirm a discharged debt in bankruptcy.

THE FOLLOWING ARTICLE IS NOT A LEGAL OPINION UPON WHICH YOU CAN RELY IN ANY INDIVIDUAL CASE. HIRE A LAWYER.

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There are several reasons why servicers are offering modifications and several other reasons why they don’t.

My perception is that the main reason for offering the modification is that the servicer is converting the ownership of the debt from the investors to the servicer and by reference to an empty trust with no assets. HAMP modifications are virtually nonexistent statistically. “In house” modifications are what they are offering; that is code for “it’s our loan now.” That scenario leaves the servicer with rights to the debt that didn’t legally exist before — but subject to separate, private agreements with the Master Servicer who is willing to pay the servicer for their apparent “services” but not willing to share in the windfall profits made by a party who now owns a loan in which they had no financial interest before the execution of the modification.

This is a good alternative to stealing from the investors by way of false claims for “Servicer advances” where the money, like all other deals in the false securitization chain, comes from “investments” that the investors thought they were making into individual trusts. And by the way this part explains why they don’t offer modifications — the Master Servicer can only apply is false claim for “recovery” of servicer advances when the property is liquidated.

A second reason for applying pressure to a homeowner to sign more papers they don’t understand is to get the homeowner to (1) agree or reaffirm the debt, thus restarting the statute of limitations from where it had originally left off and (2) to get the homeowner to make at least some payments, thus reaffirming the debt for purposes of both bankruptcy and the statute of limitations. This explains why they take three “trial” payments and then deny the “permanent” modification after they already announced the homeowner was “approved.”

In this sense there is no underwriting done. There is only an evaluation of how the Master Servicer can make the most money. This also is an example of why I say that the interests of servicers are adverse to the investors who have already been screwed. Forced sale doesn’t just artificially limit the recovery, it virtually eliminates recovery for the investor while the servicers take the money and run.

And a third reason for coercing the homeowner into a modification agreement that is guaranteed to fail is that the homeowner has either waived defenses and claims or has created the conditions where waiver could be asserted.

Schedule A Consult Now!

Will Florida’s Supreme Court protect the Homeowner or Bank?

Florida Supreme Court to rule on the Five Year Statute of Limitations

by William Hudson

In Florida, a five-year statute of limitations rule may prevent banks from being able to foreclose despite ongoing litigation.  As a result of this rule, mortgage servicers are actively attempting to preserve their right to foreclose pending the Florida Supreme Court Decision.  The Florida Supreme Court is reviewing the case, U.S. Bank v. Bartram, and will decide if servicers can restart foreclosures after five years, or if they will be barred by the Florida statute of limitations. The key question in Bartram is: When does the clock start ticking to sue to foreclose on a mortgage?  Mortgage servicers are prepared that they may not be able to collect on accounts where the homeowner has not made a payment for over five years and will be barred from pursuing foreclosure or other debt collection activity.

The Supreme Court will also determine if servicers can restart the clock.  If they are prevented from pursuing the outstanding debt, it is possible that banks will start making earnest attempts to modify loans by lowering the monthly payment or attempt to get the borrower to short-sale the property.  However, the real issue is that these homeowners will be able to live mortgage free in their homes indefinitely.  The banks had an opportunity to modify mortgages in good faith and failed to do so.  If the Florida Supreme Court upholds the five-year statute of limitations on debt collection it is probable that other states will institute the same consumer protection.

Moody’s Investor Service stated that, “The court ruling will have only a minor impact on overall RMBS performance because the number of previously dismissed foreclosure actions that are seriously delinquent or in foreclosure is minimal,” the report said. “Only approximately 3% of private label loans backed by properties in Florida had a prior foreclosure dismissed and are greater than 60 days delinquent or in foreclosure.”  Moody’s brought up the fact that only 3% of private label loans had a prior foreclosure dismissed, when the real question should be how many GSE (Government Sponsored Enterprise) loans guaranteed by Fannie Mae or Freddie Mac are near or beyond the five year statute of limitations?  The GSE loans have a higher portion of subprime loans on their books.  As usual, we hear only part of the true story.

Does the clock start ticking with the bank’s acceleration and pursuit of foreclosure, and end after five years, as the law had been in Florida prior to the Fifth DCA’s Bartram decision? In almost every other state in the country that has a mortgage foreclosure statute of limitations the clock starts ticking when the loan is accelerated leaving the bank only five years to take action.  The Bantram case will clarify if a lender can restart the clock by simply declaring a new default date- even if the statute of limitations is past the lenders original acceleration date of the loan.

Statute of limitation timelines are generally straightforward. In personal injury or fraud the right to sue expires after four years in Florida (check your state’s statutes). In written contracts, the law in Florida states the statute of limitations is five years and this includes the collection of rental payments and mortgages.  Every plaintiff knows if you fail to take action, you are out of luck if you fail to file a claim prior to the statute of limitations running out.  However, in the eyes of the Florida judiciary,  the law is not the law when it comes to mortgage claims.  As we have seen in foreclosure litigation, mortgage forgery is labeled “robosigning”, while a bank’s criminal trespass into an occupied home is called a “civil” matter.  When it comes to matters of foreclosure there is a tendency to make presumptions in favor of the bank- let’s hope the Supreme Court rules according to law.

According to Florida law, when the borrower defaults, the lender accelerates the debt and then files to foreclose.  If the Supreme Court rules for the lenders, Florida would be the only state permitting a judicial exception to the statute of limitations for mortgages. It is inevitable that this decision would unleash an explosion of litigation against homeowners in default while also inspiring banks to abandon their offers to modify mortgage loans.  The end result would be chaos for the Florida housing market.

The Bartram case is from the resulting fallout from the fraudulent robosigning (forgery) practices of the Law Offices of David J. Stern that began May 16, 2006, when U.S. Bank filed a mortgage foreclosure action against Lewis Bartram of Ponte Vedra Beach through their counsel David J. Stern. On May 4, 2011, nearly five years after the original suit, U.S. Bank missed a conference and the court dismissed the foreclosure.

In March 2011 Bartram’s ex-wife instituted a series of cross-claims against U.S. Bank and Bartram.  Eventually in July 2012, the trial court entered summary judgment in Bartram’s favor because the five-year statute of limitations had expired. The bank appealed and in 2014 the Fifth District ruled in favor of the bank concluding that a new five-year clock starts to tick with each mortgage payment that is missed. However, the Fifth District ignored the fact that there are no more mortgage payments due once a lender elects to accelerate the mortgage, as was the case in Bartram.

Acceleration is the key to understanding how a mortgage foreclosure action is supposed to work.  The Fifth District showed their bias in favor of the banks and should have ruled in favor of Bartram.  Standard mortgage contracts typically carry an acceleration clause that gives the lender two options in the event that a borrower defaults: 1) sue for missed payments or 2) call the entire loan due immediately.  As we know, the banks prefer to accelerate the debt so that they can auction the property. However, acceleration requires that the lender has five years from the debt acceleration to take legal action.

The Florida Fifth District effectively ruled in Bartram that a lender could restart the clock any time they wanted.  Interestingly, the mortgage contract doesn’t permit such an action by a lender.  It is noteworthy that apparently res judicata does not apply and that the Fifth District found that each missed payment creates a new cause of action, thereby permitting a lender to sue again and again and literally make a homeowner’s life a living hell- indefinitely if desired.

The Fifth District’s erroneous interpretation of the mortgage foreclosure statute of limitations is yet another attempt to legislate from the bench. It is the judge’s job to enforce the rules of the legislature.  If the Supreme Court upholds the Fifth District’s ruling, the Florida legislature will need to remove the mortgage foreclosure statute of limitation from the Florida Statutes because it will no longer be relevant.  Maybe they could do away with all statutes that protect homeowners while they are at it- because apparently that is what the judges’ would do if they weren’t constrained by an annoying legislative branch.

 

Why the Big Guns Are Coming Out on Rescission

For further information please call 954-495-9867 or 520-405-1688
NOTE: The rescission package we offer provides information on the specific loan of the borrower, whether rescission is an option, to whom the rescission letter should be addressed, whether your prior letter of rescission is effective, and how to prepare for further litigation regarding the effective date of rescission and the consequence of having rescinded. If you are unconvinced that this package will do you any good then don’t do it. We won’t try to convince you. We don’t offer guarantees or warranties. But we do believe in what we are doing. And note that this article (or anything else on this blog) is no substitute for advice from an attorney who is licensed in the jurisdiction in which your property is located.
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Confusion still reigns on the issue of TILA rescission. You go to a lawyer about it and he says no, the loan is too old (statute of limitations) or you don’t qualify (purchase money mortgage) or some other reason. And then the discussion turns to equitable tolling and whether the loan was really a purchase money mortgage and so the seeds of doubt are planted and take root without the banks lifting a finger. That is what they want.
The lawyers and judges and pundits were all wrong on TILA rescission. Before now, they were all saying that the rescission couldn’t be effective without the borrower filing a lawsuit and/or without tendering money or property. It all comes down to the same thing: when is rescission effective? And the answer is plainly stated by the TILA statutes, by the Federal Reserve in Reg Z and reaffirmed by a unanimous Supreme Court in Jesinowski. Rescission is effective upon mailing of the notice of cancellation of the loan deal. There is nothing that is contingent about that. You don’t need to file a lawsuit (in fact that is not the statutory procedure), you don’t need to tender anything (it is the banks and servicers who must pay borrowers for every penny they paid under the deal), and it is still effective in all events without any contingency regardless of whether the statute of limitations has run or the loan was a purchase money mortgage or anything else.
For corroboration of this, simply refer to the many arguments that banks and servicers offered when non-judicial foreclosure was invoked in those states that allow it. There, it was the banks who argued that the specific statutory scheme for starting a loan and foreclosing on it must be followed. The brief window (as short a 3 weeks in some states) for the borrower to stop a foreclosure sale has been allowed and confirmed in every case. The 20 day window for the banks to set aside a rescission that by operation of law is effective the date it was mailed is no different.
ANYTHING that might be used as an attack on rescission must be done by way of a lawsuit by the banks or servicers against the borrower and they must do it within 20 days of the effective date of the rescission. Right or wrong the rescission is effective upon mailing. If they file the action within 20 days, then the rescission for a brief window in time becomes voidable but never void. That is what Justice Scalia was telling all of us. So why won’t Judges, lawyers and borrowers believe it? The reason is simple — they are all intimidated by the power of TILA rescission and they all think that no borrower could level of the playing field by the stroke of a pen. AND they are confused by their understanding of common law rescission based upon fraud. But as Justice Scalia showed us, the rules governing common law rescission do not apply to an unambiguous statutory scheme in TILA. Courts have no right or discretion to interpret a statute that is unambiguous.

So what can a borrower expect if they have sent or is ending a notice of rescission? Be aware you are on their radar. We have emerged from the muck and ooze of primeval environment. That is why they bringing out the big guns. Holland and Knight is NOT a foreclosure mill and never will be. They want to do battle because they know the issue of rescission is a nuclear option that could blow up the entire “securitization” scheme of the banks.

What they are going to try to do is say that the rescission should not be considered effective because of the statute of limitations or because of something else like that it was a purchase money mortgage. They will say they could bring that up at any time because the rescission was void when sent. In other words they are seeking ways to make the rescission contingent upon being valid based upon some particular fact pattern they wish to represent.

That would mean that the rescission is NOT effective until there is a judicial determination that it is valid. AND THAT runs against the express wording of the statute, the express wording of the Federal Reserve’s Reg Z, and the express wording of Jesinowski. The rescission may be VOIDABLE if they file a lawsuit challenging the cancellation of the loan deal, but it isn’t VOID.

But the banks are not filing those lawsuits. They seek to raise “defenses” to affirmative allegations of rescission long after the 20 day window has expired. The Banks MUST attack rescission in this way. They can’t file the lawsuit within 20 days because of the problems with standing. If they don’t attack and try to weaken the “effective” (i.e., the day that by operation of law the deal was canceled) rescission they are admitting that their so-called mortgage backed securities are worthless junk — which is exactly what they are. Even in the current market, and even if they were doing it right, investors would need to be told  that there is a risk that one or all of the mortgage loans in the pool are susceptible to being rescinded; and, here is the kicker: they would need to disclose that any attempt to challenge such rescissions would require a proof of standing which is at the very least “difficult.” [It is difficult because standing would need to be established WITHOUT THE NOTE AND MORTGAGE, WHICH ARE VOID].

Effective means effective. It means the deal is canceled unless the banks get it set aside. But they can’t get it set aside without some action at law. A letter telling you that you are outside the statute of limitations or that your loan was a purchase money mortgage does NOTHING — except provide proof that they received the notice. And here is another kicker: those people who sent their notice of rescission years ago but were “foreclosed” anyway have a claim that every action taken after they sent their notice of rescission was VOID by operation of law. And any title company that issued a title policy without exempting transactions involved in securitized loans is probably liable for the damages. But they probably can’t get out of the cloud of liabilities created by securitization if it was a notice of rescission that was sent — because that applies regardless of securitization.

Statute of LImitations Running on Bank Officers Who Perpetrated Mortage Crisis

For more information please call 954-495-9867 or 520-405-1688

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see http://www.courant.com/opinion/letters/hc-go-after-mortgage-fraud-perps-20150427-story.html

It appears that the statute of limitations might be running out this year on any claim against the officers of the banks that created the fraudulent securitization process. Eric Holder, outgoing Attorney general, made an unusual comment a few months back where he said that private suits should be brought against such officers. The obvious question is why didn’t he bring further action against these individuals and the only possible answer I can think of is that it was because of an agreement not to prosecute while these officers and their banks “cooperated” in resolving the mortgage crisis and the downturn of the US economy.

People keep asking me what the essential elements of the fraud were and how homeowners can use it. That question involves a degree of complexity that is not easily addressed here but I will try to do so in a few articles.

The first point of reference is that the investment banks sold mortgage backed securities to investors under numerous false premises. The broker dealers sold shares or interests in REMIC Trusts that existed only on paper and were registered nowhere. This opened up the possibility for the unthinkable: an IPO (initial public offering) of securities of an “entity” that would not complain if they never received the proceeds of the sale. And in fact, as I have been advised by accountants and other people who were privy to the inner workings of the Securitization fail (See Adam Levitin) the money from the offering was never turned over to the Trustee of the “Trust” which only existed on paper by virtue of words written by the broker dealers themselves. They created a non existent entity that had no business and sold securities issued by that entity without turning over the proceeds of sale to the entity whose securities had been sold. It was the perfect plan.

Normally if a broker dealer sold securities in an IPO the management and shareholders would have been screaming “fraud” as soon as they learned their “company” was not receiving the proceeds of sale. Here in the case of REMIC Trusts, there was no management because the Trustee had no duties and was prohibited from pretending that it did have any duties. And here in the case of REMIC Trusts, there were no shareholders to complain because they were contractually bound (they thought) to not interfere with or even ask questions about the workings of the Trust. And of course when Clinton signed the law back in 1998 these securities were deregulated and redefined as private contracts and NOT securities, so the SEC couldn’t get involved either.

It was the perfect hoax. brokers and dealers got to sell these “non-securities” and keep the proceeds themselves and even register ownership of interests in the Trust in the name of the same broker dealer who sold it to pension funds and other investors. Back in 2007-2008 the banks were claiming that there were no trusts involved because they knew that was true. But then they got more brazen, especially when they realized that this was an admission of fraud and theft from investors.

Now we have hundreds of thousands of foreclosures in which a REMIC Trust is named as the foreclosing party when it never operated even for a second. It never had any money, it never received any income and it never had any expenses. So it stands to reason that none of the loans claimed to be owned by the Trusts could ever have been purchased by entities that had no assets, no money, no management, and no operations. We have made a big deal about the cutoff date for entry of a particular loan into the loan pool owned by the trust. But the real facts are that there was no loan pool except on paper in self-serving fabricated documents created by the broker dealers.

Investors thought they were giving money to fund a Trust. The Trust was never funded. So the money from investors was used in any way the broker dealer wanted. The investors thought they were getting an ownership interest in a valid note and mortgage. They never got that because their “Trust” did not acquire the loans. But their money was used, in part, to fund loans that were put on a fast track automated underwriting platform so nobody in the position of underwriter could be disciplined or jailed for writing loans that were too rigged to succeed. Then the broker dealers, knowing that the mortgage bonds were worthless bet that the value of the bonds would decrease, which of course was a foregone conclusion. And the bonds and the underlying loans were insured in the name of the broker dealer so the investors are left standing out in the wind with nothing to show for their investment — an interest in a worthless unfunded trust, and no direct claim for the repayment of loans that were funded with their money.

The reason why the foreclosing parties need a foreclosure sale is to create the appearance that the original loan was a valid loan contract (it wasn’t because no consideration actually flowed from the “lender” to the “borrower” and because the loan was table funded, which as a pattern is described in Reg Z as “predatory per se”). By getting foreclosures in the name of the Trust they have a Judge’s stamp of approval that the Trust was either the lender or the successor to the lender and that makes it difficult for anyone to say otherwise. And THAT is why TILA was passed with the rescission option.

So through a series of conduits and sham entities, the Wall Street investment banks lied to the investors and lied to the borrowers about who was in the deal and who was making money off the deal and how much. They lied to the investors, lied to the public, lied to regulatory agencies and lied to borrowers about the quality of the loan products they were selling which could not succeed and in which the broker dealers had a direct interest in making sure that the loans did not succeed. That was the whole reason why the Truth In Lending Act and Reg Z came into existence back in the 1960’s. Holder’s comments are a clue to what private lawyers should do and how much money there is in these cases against the leaders of the those investment banks. Both borrowers and lawyers should be taking a close look at how they get even for the fraud perpetrated upon the American consumer and the American taxpayer.

It is obvious that someone had to be making a lot of money in order to spend hundreds of millions of dollars advertising and promoting 2% loans. There is no profit there unless someone is stealing the money and tricking borrowers into signing loan papers that instantly clouded their title and created two potential liabilities — one to the payee on the note who never had any economic interest in the deal and one to the investors whose money was used to fund the loan. Most investors still don’t realize what happened to their money and many are still getting payments as though the Trust was real — but they are not getting payments or reports from the REMIC Trust.

And most borrowers don’t realize that their identity was stolen, that their loan was cloned, and that each version of their loan that was sold netted another 100% profit to the investment banks, who also sold the bonds to the Federal Reserve after they had already sold the same bonds to investors. Thus the investment banks screwed the investors, screwed the borrowers and screwed the taxpayers while their plan resulted in a cataclysmic failure of the economies around the world. Investors mostly don’t realize that they are never going to see the money they were promised and that the banks are keeping the investors’ money as if it belonged to the bank. Most investors also don’t realize that the investment banks were their servant and that all that money the bank made really belongs to the investor, thus zeroing out the liability of the borrower but creating an enormous profit to the investors. Most borrowers don’t realize that they certainly don’t owe money to any of the foreclosing parties, but that they might have some remote liability to the clueless investors whose money was used to fund this circus.

Florida Supreme Court Considers Clearing up Conflicts on Statute of Limitations

For further information please call 954-495-9867 or 520-405-1688

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http://www.dailybusinessreview.com/home/id=1202719316326/Florida-Supreme-Court-to-Visit-LenderFriendly-Foreclosure-Rulings?mcode=1202617073880&curindex=0&slreturn=20150203104522

“Kafaesque” is the term being applied to the state of Florida law on foreclosures. If you have commercial property then you have rights, but if it is your home, then maybe you don’t. Due process has been shattered for homeowners while complete strangers take their homes with the cooperation of Judges who are struggling with the caseload and their own bias about how damaging it would be if debts were not paid. What they are missing is that none of the people foreclosing own any debt and nobody is going to get paid as a result of the foreclosure except third parties with breadcrumbs, if any, left to the actual source of funds for the origination or acquisition of the loans.

Depending upon where you live in Florida the results are different. If you beat the foreclosing party in court, then at least one court thinks that the “bank” can re-foreclose on a subsequent default on a loan and default they failed to prove. Florida’s rule HAD BEEN clear. Banks get one chance to foreclose and if the case goes against them, they get nothing in foreclosure and if the statute of limitations has run they can’t collect on the note either. They can’t come back over and over again until they a get a judge who thinks they got it right. And it didn’t matter before whether the property was commercial or residential.

So now because various districts have interpreted the law differently, the Supreme Court must decide what it had already decided. It is reviewing teh Bartram case and will consider the arguments of all sides. For me, the issue is simple. If the borrower wants to file claims against the lender and he is barred by the statute of limitations, he is done regardless of the merits. What is good for the goose was good for the gander until the courts starting bending the rules to the breaking point. They should be corrected by the Florida Supreme Court.

Banks Struggling with Notices of Rescission

For further information please call 954-495-9867 or 520-405-1688

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We are starting to get a peek at the strategy the banks will employ in dealing with notices of rescission. In one case the homeowner sent the notice of BOA, who answered that they received it (one problem solved) and that the new servicer is Ocwen (whose business practices have been the subject of a cease and desist order for failing to comply with prior “settlements” and “consent judgments.”)
The obvious strategy of the banks is to try to raise issues that the foreclosure judge can rule upon, in which the notice of rescission is declared void WITHOUT the required lender lawsuit seeking declaratory relief from the rescission — an absolute 20 day requirement under the Truth in Lending Act (TILA). And no matter how much philosophical discussion might ensue, this is precisely why TILA was drafted and passed by Congress and signed into law by the president — all in the wake of the savings and loan scandal that shook the industry in the 1980’s and put over 800 bankers in jail. As the US Supreme Court ruled in a unanimous decision written by Justice Scalia a couple of weeks ago TILA is specific consumer remedy that must be strictly construed.
When they tell you there is another servicer they are trying to re-start the 20 days to file a lawsuit they don’t want to file containing allegations they don’t want to allege, and requiring proof they cannot satisfy. It won’t work. So far, so good. They will probably try to say you sent it to the wrong “servicer” and that therefore your notice of rescission was invalid.

The foreclosure judge will be inclined to accept any argument against the effect of rescission. But TILA is very specific, it is Federal law, and the CFPB regulations under Dodd-Frank make it pretty clear that the shell game won’t work with respect to the notice of rescission. AND their response corroborates your position that they have been continually withholding the information that should have been disclosed at the fake loan closing.

According to CFPB regulations they are all servicers and they are all “good” for service of the rescission letter. You COULD send a COPY of the letter you sent to BOA to Ocwen Certified, return receipt requested. My suggestion is do not send a brand new letter. The clock is ticking. After 20 days has passed we will move to dismiss on the basis of the rescission. The so-called “old servicer” has an obligation to forward the letter to the lender and any other servicers. The 20 days, in my opinion, keeps running from the date of the mailing of the notice.

The long and short of it is that once the notice of rescission is sent (certified mail, return receipt requested) you are now in process on this strategy. The best is that (a) they won’t respond at all which your lawyer can argue they waived the defenses because of the statute of limitations contained in the Truth in Lending Act (TILA) for failing to file the required lawsuit within 20 days or (b) they will write back threatening something, which is not the response called for by TILA or (c) they will bring a lawsuit to declare your rescission void. No matter how this turns out I see it as being potentially beneficial to the homeowner.

If they sue then they need to establish standing and allege facts that they are not being required to allege and prove in foreclosure actions. They have been fighting against being required to plead or prove those facts for 10 years. So we can safely assume they can’t allege those thing and they certainly can’t prove those things.

By “those things” I mean ownership and balance. They have to allege they are the lender or they are representing a lender and SHOW that authorization. Contrary to foreclosure actions where courts have been incorrectly ruling that they only need to prove they are holding the paper, the Declaratory action that must be filed to counter your notice of rescission must allege and prove the identity of the “lender” (i.e., the party who loaned you the money or a true successor — i.e., a successor who actually purchased the debt and wasn’t simply a naked recipient of the the bogus paperwork).

Either way you are

(a) going to get rid of the mortgage and note and you will receive a ton of money just for what you paid the pretender lender at closing or the transferees of the bogus paper — which means that you cancel the note, void the mortgage so it is no longer in your chain of title — AND a receive a ton of money for the payments you made for interest and principal on a monthly basis going back to the inception of the fake loan closing, AND/OR

(b) going to get a ton of information that the foreclosure court might not otherwise allow you to reach in discovery (request for admissions, interrogatories, request to produce, depositions) .

My guess is that they are not ready to file any such lawsuit and will try arguing to the foreclosure judge that they didn’t need to because the rescission letter was defective on its face — usually the statute of limitations or the failure “to identify the violations in the letter.”

On that last point, there is no doubt in virtually all cases across the board that the notice letter need only state your rescission. Any reason for the rescission becomes a question of fact later only if the “lender” challenges the rescission letter within the 20 day period.

As to the statute of limitations, it doesn’t apply if the “lender” withheld the information that should have been disclosed. THAT is a question of fact, and THAT too must be brought up in their lawsuit (which is the ONLY way to comply with TILA on a TILA rescission).

But they will try to lure the state court judges into ruling on the sufficiency of the notice of rescission. The state court judge will be tempted to do it because he or she will see that the house is about to become free of the of the mortgage and that the lender will owe money to the borrower — two results the judges still dislike.

That strategy might work a few times but it won’t work long, in my opinion. TILA is a specific, explicit statutory remedy that cannot be interpreted in the context of common law rescission or any other rescission for that matter. The Court is required to treat these “lender” arguments (and even the question of whether the presenting party is in fact a “lender’) as a question of fact that MUST be raised in a separate lender collateral action seeking declaratory relief in a separate lawsuit.

Banks Brace for Pain: Statute of Limitations on TILA Rescission and TILA Claims

For further information please call 954-495-9867 or 520-405-1688

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TILA remedies and requirements actually address the “free house” complaint head on: If banks misbehave in material and important ways (as defined by statute and not in the minds of a judge or lawyer) then yes, the homeowner should get a free house. That is what all three branches of the Federal government have said and no re-interpretation of TILA rescission or TILA remedies will be allowed since last week when the Supreme Court unanimously decided that TILA meant what it says. Any Judge or lawyer who thinks otherwise is in fairyland. The fact that a Judge doesn’t “like” the result of a “free house” (as the Judge perceives it) means nothing. The Judge is required to apply the law as decided by the United States Supreme Court.

Practically everyone is asking questions about whether the statute of limitations starts running from the date the documents were signed on the alleged loan or if it could start at a later time. The answer is a grey area, but as pointed out by James Macklin last night on the Neil Garfield show, there is a legal doctrine called equitable tolling that could suspend the start of the running of the statute of limitations for TILA rescission and TILA claims.

“The equitable tolling principles are to be read into every Federal Statute of Limitations unless Congress expressly provides to the contrary in clear and unambiguous language, see: Rotella v. Wood 528, 549, 560-61,120 S. Ct. 1075, 145 L. Ed. 2d 1047(2000). Since TILA does not evidence a contrary Congressional intent, it’s statute of limitations must be read to be subject to equitable tolling, particularly since the Act is to be construed liberally in favor of consumers.”

Basically the doctrine says that the statute starts to run, unless otherwise provided in the statute, when the claimant knew or should have known or most have known of the grounds for, in this case, TILA Rescission or TILA claims. The basis of that is obvious to anyone involved with these fake mortgages and fraudulent foreclosures for 8 years like I have. The very facts that give rise to TILA rescission and other TILA claims, are intentionally withheld by the parties at the fake closing where the borrower signs settlements documents, the note and the mortgage.

The strategy of the banks has been to wait out three years and then pursue foreclosure and when the borrower raises TILA defenses, the answer is that the statute of limitations has run. With the recent unanimous Supreme Court decision that effectively smacked thousands of lawyers and judges in the face for re-interpreting basic law and the specific and express provisions of TILA, this bank strategy should no longer work.

So now if you gave notice of rescission within three years of the date of the fake closing, your mortgage is null and void “by operation of law” and the “lender(s)” are required to give you (a) a satisfaction of mortgage for county records (b) a canceled original note (c) refund all the money you paid at closing for points, fees, costs etc. and (d) refund all the money you ever paid for interest and principal on the loan. Your debt becomes unsecured and there is no requirement for you to offer them any money at all in order to have the TILA rescission (“I hereby rescind my loan”) be effective. If you EVER sent such a notice within the three year period then your mortgage was void by operation of law at that time — unless the “lender(s)” filed a lawsuit (within 20 days of receipt of your notice of rescission) seeking declaratory relief saying your rescission was not based on any mistakes, errors, omissions or misbehavior on their part.

So all those hundreds of thousands of letters sent back to borrowers saying their letter of rescission was not effective were wrong. Dead wrong. And all those foreclosures that happened anyway were wrongful and void. And THAT means that what I said in 2008 is now true — that hundreds of thousands of homeowners who sent notices of rescission still own their homes even though on paper their homes were sold to third parties. The only thing that could interfere with that conclusion would be a state statute that existed at the time of the fraudulent sale  that said that you have 1 year or some other length of time to challenge the title.

So now that we know that nearly all the loans were table funded and therefore “predatory per se” (REG Z) the question becomes when did the three year statute of limitations begin to run.

There are two schools of thought on this. The first one is simple, as one caller on the Neil Garfield Show pointed out last night. If the disclosures were intentionally withheld, then even the three day rescission might still be available because the deal never actually closed and because the disclosures were fraudulent.

But in any event the statute would start to run as soon as the “borrower” found out that there were multiple people involved in his fake closing that were never disclosed — all of which undisclosed parties were involved in serving as conduits or aggregators and all of whom were paid an undisclosed amount of money arising out of the “closing.” So it is possible that even though your loan was the subject of a faked closing in 2005, you might still have a right to rescind and should send the notice of rescission since it forced the burden of proof onto the pretender lenders. This is especially important in nonjudicial states where the borrower must sue to prevent foreclosure and there is confusion over the alignment of parties.

Incidentally to drill in the point that this statute has teeth, the “lender” must pay the borrower all money paid including what was paid to third party vendors. The loss falls on the “lender” for misbehaving. If it didn’t bother the US Government (Congress, President and Supreme Court) when it passed TILA that the borrower would get a “free house” why should it bother anyone else?

UNANIMOUS SCOTUS: TILA Rescission Effective on Notice: No Borrower Lawsuit Required

For further information please call 954-495-9867 or 520-405-1688

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TENDER IS NOT REQUIRED FOR RESCISSION TO BE EFFECTIVE

SCOTUS DECISION CONVERTS RESCINDED SECURED DEBT TO UNSECURED

EFFECT ON OLD BANKRUPTCY CASES UNKNOWN

see TILA Rescission

The decision is merely a statement of the obvious. Scalia, writing for a UNANIMOUS court said that the statute means what it says. All the decisions in all the states requiring the borrower to file suit to enforce rescission are wrong. The court says the rescission is effected upon notice to the “lender.” What that means to me is that the subsequent foreclosure, non-judicial or judicial is void because there is no mortgage. TILA says that unless the “lender” files suit within a specified period of time the rescission is effective as of the date of notice. It goes on to say that the “lender” just send back all payments and a satisfaction of mortgage and canceled note.

The three year statute of limitations applies to notice — not a lawsuit filed by borrower. The burden is on the lender to contest the rescission and failing to do so within the 20 days (the time varies depending upon when you sent your notice of rescission) the deal is over.

What you have left is an unsecured debt that can be discharged in bankruptcy because TILA says the mortgage is gone. What effect this will have on the thousands of cases in which borrowers sent notices of rescission and were foreclosed remains to be seen, but it sure will be interesting to see what the courts do.

http://www.supremecourt.gov/opinions/14pdf/13-684_ba7d.pdf

“Held: A borrower exercising his right to rescind under the Act need only provide written notice to his lender within the 3-year period, not file suit within that period. Section 1635(a)’s unequivocal terms—a borrower “shall have the right to rescind . . . by notifying the creditor . . . of his intention to do so” (emphasis added)—leave no doubt that rescission is effected when the borrower notifies the creditor of his intention to rescind. This conclusion is not altered by §1635(f), which states when the right to rescind must be exercised, but says nothing about how that right is exercised. Nor does §1635(g)—which states that “in addition to rescission the court may award relief . . . not relating to the right to rescind”—support respondents’ view that rescission is necessarily a consequence of judicial action. And the fact that the Act modified the common-law condition precedent to rescission at law, see §1635(b), hardly implies that the Act thereby codified rescission in equity. Pp. 2–5.”

729 F. 3d 1092, reversed and remanded.

SCALIA, J., delivered the opinion for a unanimous Court.

While there are certain parts of this statute that are not completely clear, I have always felt that this law would eventually be the downfall of the entire foreclosure mess.

As for the statute of limitations it is not yet determined when the “transaction” has been “Consummated.” But one thing is clear — the three year period and the more narrow three day period for rescission is not “fixed.” The framers of this law understood that there might be defective disclosures that would and should defeat the claim of the “lender” that the transaction was consummated on the date that the documents were signed. If the disclosures were incomplete or just plain wrong, it appears that the framers did not want the time limit running on borrowers until the disclosures were correct and proper.

If the disclosures had the wrong numbers (more than $35 deviation from true numbers) then delivery of the disclosures has not yet occurred. And the statute is very specific in stating that the “closing” is not complete until those disclosures have been made to the borrower and accepted by the borrower.

There remains many questions that will need to be answered in the Courts. Probably the biggest one is what happens in cases where the borrower properly gave notice of rescission, and where some entity initiated foreclosure after the notice of rescission. Since TILA says that the mortgage no longer exists, the foreclosure would logically be void. Any sales of the property pursuant to the foreclosure of a nonexistent mortgage would also be void.

And any claim for quiet title directed against the parties who claim interests in the recorded mortgage would appear to be a slam dunk in cases where the notice of rescission is effective. The right to receive a satisfaction of mortgage, which TILA calls for, means that the mortgage should not be in the chain of title of the owner of the property.

But that doesn’t clear up the question of what to do about events that have long since passed. There is no statute of limitations (except perhaps adverse possession) on title defects. If the title defect exists, it is there, by law, for all time. People who have purchased property that was involved in foreclosure and where the former owner canceled the mortgage by giving notice of rescission have a built in title defect. None of the sales of such property either through forced sale in foreclosure or third party sales would be anything more than a wild deed.

For more free information about TILA Rescission use the search engine on this blog going back to 2007-2008. The Supreme Court has unanimously confirmed what I wrote back when I was the sole voice in the wilderness. Opinions ranging from scathing orders from trial judges to lofty opinions from appellate courts in the state court and federal system unanimously stated that I was wrong. Now the U.S. Supreme Court — the final stop in any dispute — has also been unanimous, stating that all those orders, opinions and judgments were wrong on this issue. As a result millions of homes were subject to foreclosure actions on mortgages that no longer existed. And millions more, hearing advice from attorneys, failed to send the notice of rescission to take advantage of this important remedy.

Are Fraud Claims Barred by Statute of Limitations? Credit Suisse (Owner of SPS) Loses

For more information please call 954*495*9867 or 520-405-1688

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I have long argued that TILA claims are not barred and that fraud claims based upon intentional withholding of information (required by the Truth in Lending Act) are also not barred by the statute of limitations UNTIL the claimant knew or should have known about the fraud. What is interesting here is that Credit Suisse, parent company of Select Portfolio Servicing (SPS) went up against the New York attorney general banking (pardon the pun) on the idea that the Martin Act could not be used against them for committing financial fraud because it was barred by the statute of limitations. They lost.

And I think the arguments that caused them to lose can also be applied to common law fraud claims as well as RICO and TILA claims as long as the required disclosures were intentional withheld about the loan closing. Kudos to Schneiderman in New York for beating back people who know they have committed fraud but earnestly hope they can get away with it because of statutes of limitations and statutes of repose. I know that the US Supreme Court has recently come out with some decisions that go against this idea, but I think in the long run they will not apply it to financial fraud arising from the mortgage crisis.

So if you raise claims that relate to TILA and you are litigating against SPS, they will argue that the statute of limitations bars any mention of TILA claims. This decision presents credible argument to the contrary. You might want to say that their parent company Credit Suisse already lost that argument.

All that money going into PR and getting “objective” securities analysts and pundits to say that BOA and the stock of other banks are a great buy now may have worked up until now, but the pyramid is starting to collapse. In my opinion things are going to go pretty bad for the big banks. When people wake up to realize that the smaller regional banks, community banks and credit unions can pick up the slack left behind by the collapse of a few large banks with extreme dominance over the marketplace, support for the big banks is going to crumble. Senator Warren might seem like an extremist to some but to me she just a realist who is sticking to the truth.

see Credit Suisse Loses in Attempt to Bar Action Under Martin Act

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